N.Y. Real Property Law § 122: Procedure of reorganization and expenses in connection therewith

§ 122. Procedure of reorganization and expenses in connection

therewith. The reorganization plan may be presented to the court with

the complaint for foreclosure, or thereafter by the trustee or by any

persons owning or representing twenty-five per centum of the principal

amount of the securities covered by such mortgage, deed of trust or

indenture at any time prior to the foreclosure sale. The plan shall

contain a statement of the minimum and maximum sums which the trustee

shall bid for the property, which sums may be varied by the court upon

its approval of the plan; and the trustee shall not incur any liability

by reason of its failure to bid more than said maximum sum. The trustee

shall not be liable for any action in executing the plan of

reorganization approved by the court except for its wilful misconduct,

fraud, bad faith or gross negligence. Hearings upon such reorganization

plan shall be at such time and place and upon such notice by

publication, mailing or otherwise, as the court shall fix in an order to

show cause why the plan should not be approved. The trustee and any

person beneficially interested in said mortgage, deed of trust or

indenture, and any person whose rights may be affected by such

reorganization, may appear upon the return day of the order to show

cause or at any adjournment thereof, and submit objections to and

modifications of the plan or an alternate plan, and the court shall hear

the parties by affidavit or summarily or otherwise, as in its discretion

it may direct, and thereupon finally determine the plan of

reorganization and fix the time and method for persons affected by such

reorganization to become parties thereto. Where neither the mortgage or

indenture, nor the statute relating to the particular class of

securities nor any other statute, authorizes the purchase of the

property on behalf of all the holders of bonds or certificates of parts

or shares, then if any holder, within twenty days after the approval of

the plan, shall file with the court a duly acknowledged dissent

therefrom, the court shall determine the cash value of the property as

if sold at a public sale and such dissenting holder shall be entitled to

be secured for his ratable share of such amount as a condition for

declaring the plan effective. In all other cases the reorganization plan

shall be deemed binding on all holders of bonds or certificates of

shares or parts unless within twenty days after the approval of the plan

one-third in principal sum of such holders shall file with the court

duly acknowledged dissents therefrom; in which event the plan may be

abandoned or may be further modified as the court shall direct, with the

same right of dissent as aforesaid as to any subsequently amended plan.

Notice of the court's approval of the plan shall be given by

publication, mailing or otherwise as the court may in particular cases

or by general rule direct. Any person aggrieved by any determination

hereunder shall have such rights of appeal as are granted to a party to

a special proceeding. The expenses and compensation of the trustee and

of any committee or person who shall have submitted a plan of

reorganization or modifications thereof shall be fixed at such sum as

the court may deem reasonable and shall be chargeable as a lien upon the

property or collectible through their assumption by the new corporation

or in such other manner as the court may approve. All proceedings and

appeals in respect to the plan of reorganization shall be entitled to

preference over all other civil causes next in order to actions or

special proceedings in which the people of the state or any officer,

board or political subdivision thereof shall be a party.